‘Inadequate’: Audit call on $368bn AUKUS cost estimate
Some of Australia’s top naval experts have cast doubt on the government’s $368bn AUKUS price tag, warning that the cost will be ‘significantly more’.
Some of Australia’s top naval experts have cast doubt on the government’s $368bn AUKUS price tag, saying the program to acquire two classes of nuclear-powered submarines will cost “significantly more” than originally thought, with higher upfront outlays.
UNSW Canberra’s naval studies group has called for an urgent and comprehensive audit of AUKUS costs “to provide a realistic financial baseline” for the program, which is already cannibalising the wider defence budget.
Labor argues it can fund the program without a major increase in defence funding beyond its currently planned outlays, which are set to rise from about 2 per cent of GDP to 2.33 per cent by 2033-34.
UNSW Canberra’s new Maritime Strategy for Australia warns the proposed expenditure “will likely be inadequate” to deliver on the government’s naval ambitions. “This is already evidenced by cuts to lower priority projects and sustainment,” the strategy says.
It argues the AUKUS ‘Pillar I’ submarine program “was not comprehensively costed at the outset and its full demand on the Defence budget is still to be fully quantified”.
The paper says a substantial increase to defence funding will be needed, urging the government to “conduct a comprehensive, independently verified costing of AUKUS Pillar I as a matter of urgency to allow for re-baselining of Defence financial requirements and recalculation of required overall Defence funding”.
The strategy also sounds the alarm over the navy’s “long-neglected” mine countermeasures and undersea mapping capabilities, saying they pose “a critical gap that must be regenerated to guarantee maritime access to ports and littoral (coastal) waters”.
It comes amid a Defence-wide cost-cutting drive, revealed by The Australian, that has forced service chiefs to slash sustainment budgets, reduce “rates of effort”, and look at axing some capabilities.
Former RSL president Greg Melick took aim at the funding issue last week, using his Remembrance Day speech to warn hat the nation’s military preparedness was being undermined. The speech earned him a rebuke from Paul Keating, who branded him a “dope” and accused him of seeking a war with China.
But retired Vice-Admiral Peter Jones endorsed Major General Melick’s warning, saying the stretched defence budget was “the elephant in the room at the moment”.
Admiral Jones, the lead author of the maritime strategy and head of the Australian Naval Institute, told The Australian: “It appears the cost (of AUKUS) is significantly more than what was originally thought, including greater upfront costs before submarine construction.”
The paper comes as the government finalises its updated defence strategy and capability investment program, both of which will be released ahead of next year’s federal budget.
Labor announced a $12bn upgrade to Western Australia’s shipbuilding precinct in recent weeks as a downpayment on AUKUS infrastructure in the state, which is likely to cost more than twice that figure.
Workforce costs are also soaring as hundreds of Australian sailors take up training places on US and British submarines, and Australian tradespeople are deployed to shipyards in both countries to gain experience building nuclear boats.
Defence Minister Richard Marles revealed the government’s $368bn AUKUS cost estimate two years ago when he announced the program’s “optimal pathway” to obtain three to five Virginia-class submarines from the US and a new class of AUKUS submarines to be built in Adelaide. He said this was equivalent to about “0.15 per cent of GDP for the life of the program”.
The Australian asked the minister’s office how the figure was arrived at, whether it had any statistical measure of its likely accuracy, and whether it would seek an independent assessment of the program’s cost. It declined to respond to all three questions.
A spokeswoman for Mr Marles instead issued a boilerplate statement repeating the government’s case for acquiring nuclear submarines.
“The acquisition of conventionally armed, nuclear-powered submarines for the Australian Defence Force is a multi-decade opportunity, representing the single biggest capability acquisition in our nation’s history and creating around 20,000 direct jobs over the next 30 years,” she said.
“Working with our AUKUS partners, Australia is not just acquiring world-leading submarine technology but building a new sovereign production line, supply chain and sustainment capability here in Australia. This includes growing the capabilities, capacity and resilience of business – particularly small and medium-sized enterprises.”
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout